Boeing has lobbied the federal government hard to impose tariffs on Canada’s Bombardier and its CSeries jets. They’ve claimed Canadian government subsidies allow the planemaker to sell at artificially low prices.
The US government announced an intention to impose a 300% tariff. Delta, which has ordered 75 of the CSeries jets, has said they expect to take delivery of the planes and not to pay a tariff.
Swiss International Air Lines new Bombardier CSeries passenger jet on display at Singapore Airshow, Copyright: prestonia / 123RF Stock Photo
Earlier today the Wall Street Journal reported that Bombardier was nearing a joint venture with Airbus for its CSeries.
And the deal was indeed announced this evening.
Discussions began in August. Ultimately Airbus will own 50.01% of the partnership and offer procurement, sales, marketing, and customer support to the program. They aren’t putting up front cash on the table. Bombardier will own 31% and the Quebec government will own 19% of the deal.
- The dilution of the Canadian government share helps with optics in trade disputes.
- And they plan to build some of the planes in Mobile, Alabama. They believe aircraft assembled in the U.S. won’t be subject to a tariff plus they highlight they’ll be creating U.S. jobs.
There haven’t been any A319 sales since 2012. The CSeries presumably fills the small aircraft gap in the Airbus successful sales portfolio.
During the announcement call this evening the word Trump never came up, natch. However they’ll be discussing delaying delivery of Delta’s aircraft order to be able to manufacture the planes in Mobile, Alabama. And they expect to scale up the Mobile manufacturing line quickly.
Since they expect to sell far more aircraft as part of an Airbus project than as a standalone Bombardier plane, they think they’ll build more planes in Quebec too even as they build planes in the U.S.
It’s ironic of course that the administration’s trade policy is letting European aircraft manufacturer Airbus pick up this asset on the cheap.